LAW FOOK KWAN v. LO LAI MING AND ANOTHER

HCA 1320/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1320 OF 2005

______________________

BETWEEN

  LAW FOOK KWAN Plaintiff
  and  
  LO LAI MING 1st Defendant
  LO FAI (also known as LAW FAI) 2nd Defendant

______________________

Coram : Before Master J. Wong in Chambers

Date of Hearing: 31 March 2006

Date of Judgment: 18 May 2006

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J U D G M E N T

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Application

1. This is an application for summary judgment by the Plaintiff against the 2nd Defendant for the sum of HK$1,345,066.54 together with interest and costs.

Background

2. The present proceedings were commenced by the Plaintiff against both Defendants on 11 July 2005. It was Plaintiff’s case that,on or about 19 April 1996, all the relevant parties executed a Deed of Family Arrangement (“the Settlement Deed”). Pursuantto the Settlement Deed, the Defendants should pay her the sum claimed herein.

3. The 1st Defendant is residing in the States and the Plaintiff is still attempting to serve the proceedings upon him out of jurisdiction. The present application is therefore only against the 2nd Defendant.

4. No Defence and Counterclaim has been filed and served by the 2nd Defendant. Nonetheless, he did oppose the proceedings as well as the order 14 application. His affirmation of opposition was filedon 21 September 2005. In short, he said that no payment should be made because the Settlement Deed was to be set aside by reasonsof misrepresentation and mistake.

5. The substantial argument of the matter went before me on 31 March 2006. Mr. Frederick Chan of Counsel represented the Plaintiffwhile Mr. Kenny Liu of Counsel defended for the 2nd Defendant. Upon hearing from both learned Counsel, I reserved my decision to be delivered. Now, I do so.

Ruling

6. Upon consideration of all the evidence authorities and submissions from the parties, I have come to conclusion that unconditionalleave is to be given to the 2nd Defendant to defend for the proceedings. My reasons appear as follows.

Reasons

7. The law relating to summary judgment is clear by now. The underlying policy of the summary procedure is to prevent the defendantfrom delaying the plaintiff to obtain judgment in a case in which the defendant clearly has no defence. Factually, is what the defendantsays believable in light of undisputed or indisputable circumstances? The Court is entitled to have regard to the commercial realityas well as to the contemporaneous documents. However, mini-trial on affidavit evidence shall not be embarked. Bare assertion isinsufficient and the defendant must condescend upon particulars. Legally, if what the defendant says is believable, does it amountto an arguable defence in law? After all, the burden lies on the defendant to show triable issue or some other reason to be a trial.

8. To start with, are misrepresentation and/or mistake believable in the circumstances? And certainly, if either of these defencescan be established, the 2nd Defendant needs not pay the Plaintiff anything. In my view, it suffices for me to say, in an order 14 application, taking into accountof all the contempareous documents, including in particular the letters written in Chinese by the parties in 1990 and 1992 to applyfor the inheritance of the subject lands from the authorities and the Settlement Deed, I cannot come to a conclusion that these 2defences are wholly unbelievable. It appears that parties did take different views as to the entitlement of the lands from the outset. Agreement was subsequently reached and reduced in the Settlement Deed. The Plaintiff and her mother were legally represented, butnot the Defendants on the papers before me.

9. On the other hand, paragraph 14/1/1 at page 162 of Hong Kong Civil Procedure 2006 (“HKCP 2006”) contains that:

“…Notwithstanding the narrow definition of fraud, however, save in the clearest possible case, it is inappropriate for the courtto decide in summary proceedings whether a defendant has been fraudulent or dishonest: see Skink Ltd (in liq.) v. Comtowell Ltd & Another [1994] 2 H.K.L.R. 26; [1994] 1 H.K.C. 646, CA, Wavefront Trading Ltd v. Po Sang Bank Ltd [1999] 2 H.K.C. 130 and Comsec Travel Ltd v. Fok Hing Tours Co. Ltd, unreported, CACV No. 276 of 2002, October 22, 2002, [2002] H.K.E.C. 1317.”

Now that, though the Plaintiffs’ claims do not based on fraud, both misrepresentation and mistake have been made issues betweenor among the parties to be disputed. As such, the state of mind of the parties will need to be investigated before a decision isto be made. Hence, it makes the summary application procedure not appropriate.

Costs and further directions

10. I do not have the benefit of hearing arguments on costs from both Counsel. However, seeing no reasons to depart from the usual costsas stated in paragraph 14/7/13 HKCP 2006 at page 191, I will make a order nisi that costs of the application be in the cause withCounsel certificate for hearing on 31 March 2006. Further, leave be granted in the followings:

(a) The 2nd Defendant do within 14 days from the date hereof file and serve his Defence to Counterclaim, if any, and

(b) The Plaintiff do within 14 days thereafter file and serve her Reply and Defence to Counterclaim, if applicable.

  (Jack Wong)
Master

Mr. Frederick H. F. Chan of Counsel, instructed by Messrs. Au, Thong & Tsang for the Plaintiff

Mr. Kenny Liu of Counsel, instructed by Messrs. Robert Siu & Co. for the 2nd Defendant